Is Performance Evaluation for the Employee or the Business?

A professional service company provides feedback to its employees whenever it receives comments from the customers. An employee might receive a pat on the back or could be called upon to discuss issues flagged. The approach is customer-oriented.

For a business, being customer-oriented is good. For the employee, the approach leaves an impression that the business doesn’t care much about him. There are two types of performance evaluations and they need to be handled differently.

1. Reactive evaluation

Customer feedback usually occurs when two things happen. Your employee did an exceptional job and the customer is thrilled, or something has gone awry and your customer is unhappy. A job well done deserves a praise. A poor job requires timely communication and corrective action. Both situations are reactive evaluation. As a manager, you need to gauge the situation and provide the appropriate feedback to the employee. For the business, it is crucial to be proactive with customer feedback. For the employee, negative customer feedback is often not well received. There is a fear of reprimand. Hence, reactive evaluation needs to be positioned as a tool to meet customer expectations.

2. Developmental evaluation

Developmental evaluation is done for the benefit of the employee. It is an opportunity for you to provide feedback on your observations regarding work approach, choice of decision, relationship with peers, and initiative to step up to work beyond the call of duty. As retaining talent is important, you need to dedicate effort to have a systematic approach for developmental evaluation. The effort reflects your commitment to employees. People want to work for companies who care about them. Developmental evaluation, whether you want to conduct it in a formal or informal way, needs to be incorporated not just for performance management, but also for employee engagement and loyalty.

For the above professional service company, it doesn’t have a formal performance evaluation in place. It figures that the informal approach in providing reactive evaluation is adequate. After all, meeting customer expectations is a top priority. However, if you want to build employee engagement and retain talent, you need to provide developmental feedback also.